The Indonesian Coconut Processing Business Association (HIPKI) said that the coconut processing industry is currently experiencing a shortage in raw materials since last year. The Vice Chairman of HIPKI said on 23 March 2016 that this happens because many coconut raw material is sold abroad, either legally or illegally.
Normally annual domestic coconut production can reach 15 billion coconuts. However this number has decreased by 30% to just over 10.5 billion following a recent drought thought to be brought on by El Nino. Meanwhile the coconut processing industry requires at least 7.5 billion coconuts each year, a number that cannot be fulfilled by relying on domestic production given the volume of raw material being exported. Specifically because in the past two years, there is a shortage of coconut raw materials globally, therefore, businesses from Thailand, Malaysia and China look for raw materials from Indonesia.
HIPKI has made recommendations to the government to impose export duties on coconut and only allow registered exporters to export this product in order to stem the flight of raw material required by local producers.